Tuesday, May 28, 2013

Many years ago, I was hired as the manager of a contractor operated
maintenance facility. During my first week I found boxes of repair parts
stashed under workstations and storage racks or laying in the isles of the
parts room.

When I asked the repair technicians why these parts had not been added
to the inventory and put in the correct parts bins, the answer was “we pulled
the parts we need to fix the the stuff the customer needed right away and just left the rest sit
till later”

As you can probably already imagine, “later” never came! Far too many of
the parts left uninventoried had become critical need and repairs could not be
completed waiting for parts that were under workbenches and storage racks.

My next step should be painfully obvious. Every nook and cranny, drawer
and hiding place was emptied, the parts (and equipment waiting for repair!)
were inventoried, placed in the correct storage location and the computerized
inventory updated.

Predictably, the vast majority of EDP (equipment dead lined for parts)
were cleared and the maintenance backlog that had existed for months magically
disappeared. We also discovered serious overstocks of parts that were critically
needed by other maintenance facilities that could be cross-shipped to clear
long standing backlogs.

The point is not that simple good practices fixed a silly problem or
that people taking the easy way out created more problems than they solved. The
real point is that looking only at the short term issue, the customer needs
this one piece of equipment by close of business, became a mind set that missed
the bigger issue.

Yes, that customer might be screaming for that one piece of equipment
today but, and it’s a critical but, if we didn’t return 1,200 units each and
every month the entire operation ground to a halt at a cost of (in 1983
dollars) a quarter of a million dollars a day.

We can all come up with a plan to get that one critical piece of
equipment repaired and back to the customer while still inventorying and
stocking the newly received parts. The repair technicians, as they should be,
were so focused on the single repair job they never looked beyond the
immediate pressure point.

What about the manager who should have been looking at the bigger
picture?

Trust me, the guy was very bright but he had been in the most high
pressure, visible job the company had for just under two years and had become
completely burned out. He was moved back into engineering and later to
engineering management where he performed brilliantly. I always suspected that
if he could have taken a month off, away from the daily pressure he would have
spotted the same issues and solutions I did.

The years I spent as the manager of that facility taught me more about
managing competing pressures and demands than anything before or since.

To paraphrase Kipling: If you can keep your head while all those around
you are loosing theirs, you will make a great manager.

Monday, May 20, 2013

US census bureau reports that in 2009 the median home price
was $216,700 and the average price was $ 270,000.

According to the National Automobile Dealers Association,
the average price of a new car sold in the United States is $28,400.

If we accept that you only need 10 percent down to buy a
house, then you will need to finance $243,000. With a 30 year fixed mortgage at
7% your monthly payment will be $1616.

To buy a new car with 1/3 down you will need to finance
$18,933 resulting in a monthly payment of $580.

So lets do some calculations:

House payment$1616

Car payment$580

Car Insurance$200

Telephone$60

Electricity$125

Food$600

Monthly total$3181

That suggests a weekly income of $734 a week or $18.35 an
hour.

The March 2004 wage number (the latest I could find) state
that the average weekly income is $520 a week or $13 an hour. Bump that monthly
wage $2253 against the projected monthly costs and the average wage earner
can’t afford an average house or an average priced new car and still meet the
minimum to live an average life.

Keep in mind that we didn’t include clothing costs, gas
costs or any of the other reasonable monthly expenses. So the question is why
is anyone shocked that personal debt is so high? In attempt to live an average
life style the average American worker had a short fall of about $1,000 a month
or $12,000 a year.

It’s not that the average American had unrealistic
expectations; it is American business that had the unrealistic expectations.
Business expected people to work for less than a living wage or they expected
that a lot of working Americans would live far enough below the “average” to
support the people making well about that average wage.

National Center for Children in Poverty has developed a Basic
Needs Budget that calculates the minimum cost for a family of 4 to live at, in
their words, a bare-bones level.

The Basic Needs Budgets show that it takes an income of
about 1.5 to 3.5 times the official poverty level ($22,050 a year for a family
of four), depending on locality, to cover the cost of a family’s minimum
day-to-day needs.

According to the Social security website, the median wage is
66.8% of the average wage.

Do these numbers give you any insight into what the problem
with the US economy is and where the blame really belongs?

Monday, May 6, 2013

The more people who own little businesses of their own, the
safer our country will be; for the people who have a stake in their country and
their community are it’s best citizens.

John Hancock

If old John was right, perhaps that’s part of what’s wrong
with the country today. Corporations don’t think of themselves as citizens of
the city, county, or even the country where their office is – they think of
themselves as global citizens. As global citizens, they have little or no stake
in health of the community or country where their offices and factories just
happen to be located.

Just as the right choice of a car for you may not be the
right choice for your next-door neighbor, the right choice for a global
corporation may not be the right choice for a local business. Putting all our
government support behind those big, global corporations rather than the
smaller local business is, in far too many cases, turning out to be a bad
choice for the nation as a whole.

Just perhaps the founding fathers were on to something in
fearing big corporations. As Ted Nace points out in “The Gangs of America” the
founding fathers had the example of the East India Company and it’s use of a
charter issued by the king of England to stifle competition. The East India
Company had no interest or concern for the lives or livelihoods of the American
colonist, only for the company’s profits.

In much the same way
modern corporations seem to have no concern for the lives of their workers or
the communities in which the company happens to have it’s offices.